07 Question (3 points) a See page 133 The price of a large pizza decreased from

Question

07 Question (3 points) a See page 133 The price of a large pizza decreased from $15.00 to $11.00. As a result, the quantity demanded of skateboards increased from 320.00 to 340.00 3rd attempt Part 1 (1 point) ? See Hint Using the midpoint formula, what is the percentage change observed for the price of a large pizza? Give your answer to two decimal places. 1% Part 2 (1 point) OSee Hint Using the midpoint formula, what is the percentage change observed for the quantity demanded of skateboards? Give your answer to two decimal places Part 3 (1 point) O See Hint What is the cross-price elasticity of demand between pizzas and skateboards? Give your answer to two decimal places.

Explanation / Answer

part 1 = P2 - P1 / ( P2 + P1 / 2)

% change in price = 11-15 / ( 11 + 15 / 2)

= - 4 / 13

= -30.76 %

part B -) % change in quantity demanded = Q2 -Q1 / (Q2+ Q1/ 2)

= 340 - 320 /( 340 +320 / 2)

= 20/330

= 6.06%

part 3) croos-price elasticiy of demand = % change in quantity demand of skateboards / % change in price of pizza.

cross - price elasticity = 6.06 / 30.76

= -0.19 %

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